WVDOH Experience . . . thus far

WVDOH Experience . . . thus far
 Public-Private
Partnerships
= PPP=3P = P3
 . . . Most folks in industry
refer to them as P3, so that’s
what I go with.

A contractual agreement
between a public agency and
a private sector entity that
allows for greater private
participation in the delivery
and financing of
transportation projects.
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Design
Build
Finance
Operate
Maintain
“Greenfield” projects
 Involve the development of new infrastructure.
Most transportation P3’s are Greenfield.
“Brownfield” projects
 Operate, maintain, preserve, or improve existing
infrastructure. Generally limited to long-term
operations and maintenance contracts or lease
concessions.
Blended “Greenfield- Brownfield” projects
 Example: adding additional high-occupancy toll
lanes to an existing highway to increase capacity
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Changing economic conditions
Delayed federal transportation
reauthorization bill
Declining value of fuel taxes
Reluctance to increase fuel taxes
Growing infrastructure needs
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WV Code Chapter 17 Article 27
Went into effect July 1, 2013
Construction contracts shall be awarded to the
lowest qualified responsible bidder.
Unsolicited proposals may be submitted, but
the DOH has no obligation to accept or even
consider them.
State Road Fund money may be used if project
is >$20 million and contained in six-year plan.
Current legislation is set to expire June 30,
2017
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Access to private capital
Reduce costs borne by DOTs
Accelerate project delivery
Shift project risk
Spur innovation
Provide for more efficient
management
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Project was to grade and drain a partially
controlled access facility on new location
from east of Wyoming CR 12/1 to Mullens
(1.72 miles) including the Mullens
Connector (1.08 miles)
Awarded to the Bizzack/TRC team on
12-17-14, who was the low bidder in the
amount of $45.25 Million (Engineer’s
Estimate was approx. $63.27 Million)
Page 11 of the Agreement (Contract) states:
“Proposer is to provide Gap Financing for this project.
Gap Financing, for the purposes of this agreement, is
defined as the incurrence of a temporary financial
obligation on the part of the CONTRACTOR resulting
from DOH’s payment period extending beyond the
project completion date. Payments will be made
monthly based upon the project’s CPM schedule and
performance. Payments will be limited to a maximum
amount of $ 1,600,000.00 per month. Payments are
contingent upon satisfactory progress and will cease
if project is behind schedule. Payments will resume
upon reaching CPM schedule adherence in
accordance with the 2010 Standard Specifications, as
amended by the 2014 Supplemental Specifications.”
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Final payment will not be made until the
project is deemed complete. Completion
will be based on DOH acceptance of final
grade, drainage structures, and sediment
and erosion control features.
Completion anticipated in Fall 2017.
Monthly Estimate vs. Monthly Payment vs. Even Monthly Payment
$3,000,000.00
$2,500,000.00
$2,000,000.00
$1,500,000.00
$1,000,000.00
$500,000.00
$0.00
Monthly Estimate
Monthly Payment
Even Monthly Payment
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Design, construct, and finance a facility on
new location from WV 869 in Putnam
County to CR 40 in Mason County, a
distance of approximately 14.6 miles
Grade and drain only.
The Bizzack/TRC team was again the low
bidder at $175.45 Million.
Monthly payments are in the amount of $4.9
Million.
Payment period of approximately 3 years
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Corridor H section 1 from Kerens to
the US 219 connector – scheduled for
October 20, 2015 letting. Anticipated
payout will be $4.5 M/month
Wellsburg Bridge
Corridor H sections 2 & 3
Building & Grounds Project (New
County Headquarters at 7 facilities; 2
new Substations)
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Long-term concessions can
improve asset management-the
same party that constructs the
project is responsible for longterm operation. This creates
incentives to build a higher
quality facility that is easier to
maintain.
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P3s can be valuable options for states
seeking innovative approaches and
funding to repair existing and build
new infrastructure projects. However,
they are only one piece of the funding
puzzle. They are best suited to large
scale projects that have ongoing
maintenance needs.
P3s can offer alternative project
delivery methods or financing
mechanisms, but in the long term
do not provide new money for
infrastructure. Revenues to repay
the private investment must come
from the same source of public
financing: tolls, fees, or taxes.
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If the private sector provides
financing, it will need to cover
costs and also make a return on
its investment, either from a
revenue generated by the facility
(such as tolls) or from public
sector compensation.
Detailed description of the graphic
P3 Options fall into three categories; options fall along a continuum from Public Responsibility to Private Responsibility. New Build Facilities (Private Contract Fee Services, Design Build, Design Build Ope
Public-private partnerships (P3s) are contractual agreements formed between a public agency and a private sector entity that allow for greater private sector participation in the delivery and financing of tra
This section of the FHWA P3 website identifies and defines some of the more common types of P3 arrangements. There are many different P3 structures, and the degree to which the private sector assum
These relationships are depicted in the diagram above. Select any P3 option from the diagram to learn about distribution of roles and responsibilities between the public and private sectors for that specific